Correlation Between Navient Corp and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Navient Corp and Barings BDC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Navient Corp and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navient Corp and Barings BDC, you can compare the effects of market volatilities on Navient Corp and Barings BDC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Navient Corp with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navient Corp and Barings BDC.
Diversification Opportunities for Navient Corp and Barings BDC
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Navient and Barings is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Navient Corp and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and Navient Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Navient Corp are associated (or correlated) with Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Navient Corp i.e., Navient Corp and Barings BDC go up and down completely randomly.
Pair Corralation between Navient Corp and Barings BDC
Given the investment horizon of 90 days Navient Corp is expected to generate 1.86 times more return on investment than Barings BDC. However, Navient Corp is 1.86 times more volatile than Barings BDC. It trades about 0.3 of its potential returns per unit of risk. Barings BDC is currently generating about 0.17 per unit of risk. If you would invest 1,306 in Navient Corp on November 2, 2024 and sell it today you would earn a total of 121.00 from holding Navient Corp or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navient Corp vs. Barings BDC
Performance |
| Timeline |
| Navient Corp |
| Barings BDC |
Navient Corp and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navient Corp and Barings BDC
The main advantage of trading using opposite Navient Corp and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navient Corp position performs unexpectedly, Barings BDC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Barings BDC will offset losses from the drop in Barings BDC's long position.| Navient Corp vs. FirstCash | Navient Corp vs. Nelnet Inc | Navient Corp vs. Orix Corp Ads | Navient Corp vs. Federal Agricultural Mortgage |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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